24 Apr 2009

Government to expand nine-day fortnight scheme

9:03 am on 24 April 2009

The Government has announced details of an expansion to its nine-day fortnight scheme to save jobs.

The proposal was put forward at February's job summit as a means of keeping and creating jobs in a time of recession.

Under the original scheme, which three firms have taken up, companies with 100 or more staff could apply for a wage top-up to help cover hours cut from each worker's fortnight.

Prime Minister John Key says the scheme will now include medium-sized businesses with 50 to 100 workers and is available to an extra 2,000 businesses employing about 140,000 workers.

Mr Key says if 6,000 of those workers take up the scheme it would cost the Government about $4.5 million.

He says the decision to expand the scheme follows discussions with employers and unions, and could save more jobs.

Business New Zealand expects more companies will adopt the nine-day fortnight.

Chief executive Phil O'Reilly says it will take time for companies to look closely at the scheme, before discussing it with unions and staff.

Mr O'Reilly says intense media interest is also preventing firms from joining, but the scheme should catch on in the next 12 to 18 months.

Labour leader Phil Goff says only 117 jobs have been saved so far, and the expanded scheme will do little for most of the 60,000 people Treasury estimates will lose their jobs this year.

He says most New Zealand companies employ fewer than 20 people, and the scheme will not help small businesses or public sector workers.

Among the businesses which are now eligible for the scheme is EuroPlan in Auckland. Managing director Paul van Dorsten says the nine-day fortnight may not be enough to save jobs in tough times. Businesses of its size have already reduced costs, he says, and staff are too busy to take a day off every fortnight.

Swazi Apparel in Levin, which employs 73 workers, could also apply. Chief executive Davey Hughes says he will consider the scheme if business slows, but adds the Government could do more to save jobs by encouraging firms to avoid outsourcing work overseas.